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Where do we start with saving /investing?
Rowbo
Posts: 72 Forumite
Hello!
We have finally go ourselves into a position (after house moves, extensions, kids, etc) to think about some proper long term savings / investments. We've always saved but always for a project which we've then spent it on. So, what now??
We are both around 40, own a house with 115k mortgage left and a term of 15 years. Our kids are aged 11 and 8. Husband is a higher rate tax payer and I currently pay no tax as my 'job' only brings in around £400 a month.
Husband has a pension. I don't know many details but I think he pays 4% which is matched by the company.
We have £10k saved as a redundancy fund which we would like easy access to incase we need it. This would cover a few months outgoings if needed.
We have about £1000 each month now which can be put towards saving / investments. We are very keen to pay off the mortgage asap as this gives us complete security, frees up nearly £700 a month and would be quite cool. We would also at some stage like a second property either a holiday let or long term rental for now.
I think I would also quite like to take out a LISA (I'll be 40 in November) which seems like a sensible option as I have no pension to speak of (a couple of very tiny ones from the days where I had a real job!). This would probably be a S&S Lisa.
And finally, we would like to have a go at investing (other than the Lisa). After reading lots on Monevator and TheEscapeArtist, I think we would pick a vanguard fund and be passive investors for at least 15 years, drip feeding monthly.
So, after that long fact file, I would love either some advice or just to hear what you would do in our situation. Invest it all? Pay off mortgage first? Split the monthly savings between mortgage / LISA / investments?
Long term plans would be to be mortgage free, early retirement, modest holidays (we are more drive to France than cruise the world, but we do like to ski!), help the kids out financially.
Thank you!
We have finally go ourselves into a position (after house moves, extensions, kids, etc) to think about some proper long term savings / investments. We've always saved but always for a project which we've then spent it on. So, what now??
We are both around 40, own a house with 115k mortgage left and a term of 15 years. Our kids are aged 11 and 8. Husband is a higher rate tax payer and I currently pay no tax as my 'job' only brings in around £400 a month.
Husband has a pension. I don't know many details but I think he pays 4% which is matched by the company.
We have £10k saved as a redundancy fund which we would like easy access to incase we need it. This would cover a few months outgoings if needed.
We have about £1000 each month now which can be put towards saving / investments. We are very keen to pay off the mortgage asap as this gives us complete security, frees up nearly £700 a month and would be quite cool. We would also at some stage like a second property either a holiday let or long term rental for now.
I think I would also quite like to take out a LISA (I'll be 40 in November) which seems like a sensible option as I have no pension to speak of (a couple of very tiny ones from the days where I had a real job!). This would probably be a S&S Lisa.
And finally, we would like to have a go at investing (other than the Lisa). After reading lots on Monevator and TheEscapeArtist, I think we would pick a vanguard fund and be passive investors for at least 15 years, drip feeding monthly.
So, after that long fact file, I would love either some advice or just to hear what you would do in our situation. Invest it all? Pay off mortgage first? Split the monthly savings between mortgage / LISA / investments?
Long term plans would be to be mortgage free, early retirement, modest holidays (we are more drive to France than cruise the world, but we do like to ski!), help the kids out financially.
Thank you!
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Comments
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If hubby is a higher rate tax payer then increasing his pension contributions suggests itself, personally I would prioritise this over the mortgage, and it's still investing. It would also make sense to put any non tax protected savings in your name to use your personal allowance and larger personal savings allowance0
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If hubby is a higher rate tax payer then increasing his pension contributions suggests itself, personally I would prioritise this over the mortgage, and it's still investing. It would also make sense to put any non tax protected savings in your name to use your personal allowance and larger personal savings allowance
Thank you. I have been wondering about increasing his pension contributions. We will have a look into this.0 -
I'd put your total salary into your pension.Save 12 k in 2018 challenge member #79
Target 2018: 24k Jan 2018- £560 April £26700 -
Hmmm, I'm not sure about putting it all in. I understand that it makes complete financial sense and it the most tax efficient way of saving for retirement, but it gives us no flexibility before then. I think we'd like the option of getting at some of it over the years if needed.
I will certainly look into upping his contributions though.0 -
Courtesy of the ukpersonalfinance Reddit
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@Tarambor that's a great table. Thank you. Unfortunately I didn't end up in the 'spend it and enjoy' box but it was great to see that we are down in the final stages.
It doesn't mention paying off the mortgage though. It this a really bad idea?0 -
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I meant you singular in my pension comment. Leaving £600/month for other savings/investments.Save 12 k in 2018 challenge member #79
Target 2018: 24k Jan 2018- £560 April £26700 -
Thank you. I have been wondering about increasing his pension contributions. We will have a look into this.
Basically, 100 into a pension for him (his company one or elsewhere) will cost only 60.
Where else can you get that immediate return? Bear in mind that is his income over what is already being put into a pension. If his current contributions out him under the HRT threshold then 100 into pension costs him 80.
Speaking of which-your pension. If he is using his pension to take care of the HRTax, then a pension for you (you put in 2880 and it becomes 3600 after tax relief is added) is a very good option.
AS when you are retired, you both have the same annual allowance So having all the income in his name will mean you lose money to tax- so you need to balance your pensions (after his HRT is filled up)0 -
"Make minimum payments on all debt".......is that good advice? I'd pay off all debt (other than a mortgage) before I proceeded beyond that box.“So we beat on, boats against the current, borne back ceaselessly into the past.”0
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